A new student loan reduction plan will be available to 1.4 million borrowers in New York City.

Mayor Eric Adams on Thursday announced the loan reduction and college savings assistance program, which also offers specialized assistance for 1.6 million parents and guardians in lowering the costs of a college education.

Why It Matters

The program will help many borrowers who contribute to America's $1.8 trillion in student loan debt.

Since President Donald Trump's One Big Beautiful Bill Act was signed into law last month, the Department of Education will abolish the SAVE program and other income-driven repayment (IDR) options by July 2028.

Borrowers currently on SAVE will be transitioned to new plans, either the Repayment Assistance Plan (RAP), which is slated to launch by July 2026, or a revised Standard Repayment Plan. However, these plans typically offer higher monthly payments and may make it more difficult for borrowers to afford basic necessities.

"Student loan programs have become overly complex, and the recent changes by the current administration have only made things worse," Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek.

"Borrowers are struggling—many are in default, and some can't even access the federal loan portals they need. NYC is stepping up to reduce the burden, especially for public sector workers, by offering real solutions to lower debt and simplify the repayment process."

What To Know

The student loan reduction and college savings assistance program will be available to all New York City residents, estimated to help them save a collective $1 billion.

Since the city partnered with student loan platform Summer, city residents who work as public servants have lowered their debts through the federal government's income- driven repayment plans and the Public Service Loan Forgiveness program.

Now the program will be available to another roughly 1.4 million New Yorkers who either already have student loan debt or are enrolling in college.

"Anyone who lives in the city's five boroughs with student debt or who is planning for college can access Summer's platform for free, thanks to the city's sponsorship," Will Sealy, CEO and founder of Summer, told Newsweek.

"In addition to providing financial relief, this program also removes the administrative burden on people who are trying to access loan assistance, scholarship programs, and other ways to save on college costs. We've already helped thousands of NYC employees determine their eligibility for and enroll in forgiveness programs because we've simplified the process."

Parents and guardians in particular will also get specialized assistance. The city estimates the program will reduce student loan payments for New Yorkers by an average of $3,000 per year and $7,000 per year for those with advanced degrees.

"Leading a financially healthy life is a difficult task when you are tackling student loan debt — something I know firsthand," Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga said in a statement. "With this new expansion, we are extending support to millions of New Yorkers who have or are thinking of taking on student loans."

In the first three months of the city employee loan program, New Yorkers saw $13.8 million in savings and an average reduction of $3,800 in annual student loan payments.

The pilot program was originally announced in May to help city employees take advantage of the Public Service Loan Forgiveness program, but now all New York City residents qualify to use Summer's online portal. Through this portal, you can verify your eligibility for programs that lower payments, compare repayment options and manage paperwork for enrolling in federal programs.

On the college planning side, residents will have access to online tools to figure out how much they need to save and strategies to make higher education more affordable.

Michael Ryan, finance expert and founder of MichaelRyanMoney.com, said the program is a "smart move" by the local government, especially as it looks to keep young talent in the city.

"Mayor Adams is focused on his admin's push to make the city family friendly," Ryan told Newsweek. "It's not altruism; it's to keep young talent from fleeing NYC to cheaper, more affordable places."

What People Are Saying

Adams, in a statement: "Getting an education shouldn't lead to a lifetime of debt; yet, for far too many New Yorkers, getting a college degree and a higher education means more bills, more debt, more money out of their pockets... Working with Summer, we will expand our groundbreaking partnership and help millions of New Yorkers bring down their monthly student loan payments by thousands of dollars and save even more on the cost of a college degree. We are lowering costs for families, helping them connect to debt relief, and making our city the best place to find opportunity, raise a family, and live the American Dream."

Sealy, in a statement: "Student loan repayment and college cost planning are increasingly complex processes to navigate. Thankfully, the City of New York is stepping up to provide additional access to resources, tools, and programs to reduce that complexity."

Thompson also told Newsweek: "Whether this becomes a model for other cities depends on the political climate. It's unlikely red states adopt anything close to this. They're more aligned with the administration's stance on repayment. But in blue or more progressive-leaning areas, this could absolutely catch on. That said, don't be surprised if this ends up being another battleground in the courts."

What Happens Next

As the first program of its kind for any major U.S. city, Sealy said Adams and the New York City government are setting a larger example for what other cities can do to improve affordability for residents.

"This public-private model lets other cities leverage existing expertise without building from scratch," Sealy said. "Student debt affects local workforce retention and economic development. Cities don't need to wait for D.C. to take action when they have the tools to help their own residents today. Many other large municipalities already have similar programs of their own in the works, which we're excited to support."